Hong Kong is 2.5 times as built "up" as Manhattan is, yet Hong Kong is even more
expensive per unit than Manhattan. And generally, the data runs in that direction
- not only does intensification within a regulatory boundary "not restore affordability",
it seems that the more density you “allow”, the higher your average housing unit
price gets. The correlation runs the opposite way to the assumption. At the other
end of the data set for cities globally, are very rapidly-sprawling cities like Atlanta
where the density is around 1/40th of Hong Kong and the average section size is 2/3
of an acre; yet the real per-unit housing price on average is 1/5 of Hong Kong. Obviously.
It is a terrible mistake to be confusing ALL zoning rules with the single true determinant
of inequity in housing and economic mobility.
That is, can rural land at rural land prices, be converted to urban use?
Density has a major effect on another variable: housing prices. A paper by Issi Romem
of Buildzoom.com points out, no city has been able to contain itself within urban
limits and, within those limits, built enough dense housing to keep housing affordable.
Dense housing is simply more expensive than low-density housing: the land is more
expensive, construction is more expensive, and labor in more expensive housing markets
is more expensive. Basically, he concludes, regions have a choice between becoming
more expensive or more expansive.
No matter how often urban planners chant, “grow up, not out,” the fact is that no
urban area in the nation has ever made housing more affordable by increasing its
density. In fact, as the chart above shows, there is a clear correlation between
density and housing unaffordability.
There is virtually no research that suggests that intensification has restored middle-income
housing affordability at the metropolitan area level. In fact, the evidence from
13 years of the Demographia International Housing Affordability Survey is that metropolitan
areas that have reached severely unaffordable median multiples have not been restored
to affordability. For example, in 2016, Vancouver’s median multiple reached 11.8,
well above its level of 4.0 before urban containment policy. Similarly, Toronto’s
price to income ratio is 7.7, more than double its 3.5 in 2000, before implementation
of urban containment policy.77
Thus, there are enormous barriers to improving middle-income housing affordability
across metropolitan areas through intensification. Cox Restrictive LU Regs.pdf